Amazon accused of cheating customers through shipping costs

A United Parcel Service driver delivers packages from Amazon.com in Palo Alto, Calif., Thursday, June 30, 0211. (AP Photo/Paul Sakuma)
March 13, 2014 7:01:05 AM PDT
Amazon claims that a $79 annual membership for Amazon Prime provides free two-day shipping on "millions" of items, but for some products, the company is accused of encouraging sellers to inflate shipping prices, according to two recent lawsuits.

"The bottom line is the free shipping that Amazon offered to its Prime members wasn't free," said Kim Stephens, attorney for one of the plaintiffs, adding that he was "shocked" by Amazon's alleged pricing practices.

Marcia Burke of Alabama says she became an Amazon Prime member and used its "free shipping" service at least 18 times in 2010, according to her lawsuit filed Friday in federal court in Seattle. Prime-eligible products are designated on Amazon's website.

In what she hopes will be certified as a class-action lawsuit, Burke accuses Amazon of encouraging third-party vendors to include in the price of their items the amount they would have charged for shipping in their items to maximize revenue and profit margins. She also accuses Amazon of encouraging vendors to increase their prices to Prime members by the amount they charged others for shipping, without revealing that a portion of those alleged "inflated" prices was for shipping fees, the lawsuit claims.

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